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How Greek tax evasion sunk the global economy
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Greek tax evasion is estimated by three economists who studied data from Greek banks at about $11 billion based on a 40% tax rate, a third of the country's annual deficit for 2009. Unreported income is estimated at $28 billion. Doctors, dentists, lawyers, architects, engineers are the biggest groups underreporting income. Greece's parliament took up a bill in 2010 but the bill failed because of oposition from these groups. It remains to be seen if the Samaras government with support of the IMF-EC can take action similiar to that taken by the Monti government in Italy to go after tax evaders. By cutting the minimum wage and incomes of lower income groups disproportionately compared to cracking down on tax evasion and protecting incomes of higher income groups the economic plan for Greece proposed by the IMF-EC and the Greek government becomes unworkable and threatens the social fabric. By not raising this issue Germany's media and government have appeared callous in their pursuit of austerity measures as working class Greeks protested in Athens in 2011-2012, even though some of the issues raised by the Germans are legitimate. France and Italy are imposing a wealth tax to cut the deficit but this is not taking place in Greece. Global financial media has also not reported adequately on these aspects of the problem in Greece and Italy.
Causes of the debt crisis in Greece and the failure to come to terms with the problem inside Greece
03/03/2010
A estimated one third of the workforce is in the public sector in Greece placing a large burden on the government budget. Nominal private sector labor costs went up by 62% in Greece compared to 15% in Germany for the period 2000-2008. Much of this was done through the government spending of borrowed money. The smaller private sector with only small productivity gains and the weak tax collection was never going to be able to support the large number of civil servants. Carney says the 30,000 reduction in the number of civil servants agreed to for 2010 has not been done, raising questions about implementation of the 150,000 in reductions required by the EU.
Grouped Articles
Greek Debt Crisis: The Back Story
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Wall Street Journal 03/03/2010
Athens's Love Affair With the Euro Persists
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The Submarine Deals That Helped Sink Greece
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In Greece, Bailout May Hinge on Pursuing Tycoons
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The austerity spending cuts and new taxes in Greece- 2011-2012
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Greek Patience With Austerity Nears Its Limit
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Greek Ship Owners Fear Syriza Tax Plan
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Greece Wanted to Reframe Europe’s Austerity Debate. It Failed.
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Mirage of Economic Turnaround Masked New Greek Crisis in the Making
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Wall Street Journal 06/29/2011
Two-Day Strike in Greece Ahead of Austerity Vote
New York Times 06/28/2011
Italy's culture of tax evasion and the cost to the economy
11/25/2011
One estimate of the loss to the Italian Treasury from tax evasion- through underreporting of income from plumbers to real estate agents and large property owners and other forms of tax evasion- is $340 billion. With the deepening economic crisis the sense of what this is costing the country is beginning to sink in. About 73% of Italians now support the fight against tax evasion being led by the new government of Mario Monti, the former European commissioner. The loss is not only to the Treasury and ability to balance the budget without deficits, this also burdens companies and reduces capital needed for investments in plant, new equipment, and R&D, which create jobs.
Grouped Articles
Amid crisis, Italy confronts a culture of tax evasion - The Washington Post
Washington Post 11/25/2011
Italy Plan Opens Pivotal Week for Euro
Wall Street Journal 12/05/2011
BusinessWeek 12/08/2011
Italy Tries to Raise the Social Stigma on Tax Evasion
New York Times 12/24/2011
Italy’s uphill financial fight - The Washington Post
Washington Post 12/27/2011
Deepening Crisis Over Euro Pits Leader Against Leader
Wall Street Journal 12/30/2011
Greece's culture of tax evasion and the cost to the economy
06/24/2010
Economists using data from Greek banks estimate the tax evasion in Greece at $11 billion based on a 40% tax rate, or about one third of the deficit for 2009. Unreported income is 28 billion euros.
Grouped Articles
Greek Tax Crackdown Yields Little Revenue
New York Times 05/12/2013
BusinessWeek 06/24/2010
Greek Ship Owners Fear Syriza Tax Plan
Wall Street Journal 01/28/2015
In Greece, Bailout May Hinge on Pursuing Tycoons
New York Times 02/26/2015
Economist 07/12/2015
Wall Street Journal 07/09/2012
Antonis Samaras of Greece's New Democracy Party and the European Union programs for Greece
07/05/2011
Samaras says the tax increases will hurt the Greece economy and the shrinking Greek economy under the current program will lead to the failure of the E.U.'s program for Greece.
Grouped Articles
EU Dismisses IMF's Criticism On Greek Bailout
Wall Street Journal 06/07/2013
New York Times 06/23/2013
Fractious Greek Government Splits
Wall Street Journal 06/25/2013
Greek Draft Budget Sees Primary Surplus, Return to Growth
Wall Street Journal 10/14/2013
Athens's Love Affair With the Euro Persists
Wall Street Journal 11/04/2013
Next Hurdle for Greece's Economy: Its Own Political Uncertainty
New York Times 10/13/2014
Italy and a new wealth tax
11/14/2011
Grouped Articles
Tax Cheats Become Italyâs Public Enemy
New York Times 03/09/2012
Taxes From the Wealthy Won't Solve All Italy's Problems
Wall Street Journal 11/14/2011
BusinessWeek 12/08/2011
Italy Tries to Raise the Social Stigma on Tax Evasion
New York Times 12/24/2011
Italy’s uphill financial fight - The Washington Post
Washington Post 12/27/2011
Austerity in Italy: Terrorising the taxman
Economist 01/07/2012
Greece's Path Back (9)- What went wrong
02/14/2012
Linked Articles
Wall Street Journal 02/14/2012
How Greek tax evasion sunk the global economy
Washington Post 07/10/2012
Greece and EU in 2015- (4) How are the structural issues such as tax evasion in Greece being tackled, after Monti's effort to tackle this in Italy in 2012?
02/18/2012
Surprisingly the Syriza government in 6 months in office did not come up with a plan to implement for tax evasion. This was a major issue for the IMF and in Greece's interest, even though it was going contrary to long standing practice in Greece as it was in Italy. Estimates of lost revenue are about $11 billion each year for tax evasion. By comparison the IMF payment due was less than $2 billion on June 30, 2015. Sustainable long term finances make this a major issue in Greece's own interest. Greece has an aging population and the number of retirees are growing in relation to young working people making this an important issue for stable finances under any administration, and regardless of the euro.
Linked Articles
How Greek tax evasion sunk the global economy
Washington Post 07/10/2012
A Hollow Target for Greek Debt
Wall Street Journal 02/18/2012
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